UBS Group (UBSG) Goldman Sachs 29th Annual European Financials Conference summary

Capital requirements and regulatory developments

• New Swiss capital proposals could require a $24 billion CET1 capital increase, mainly for foreign subsidiaries, raising the group CET1 ratio to 19% but reducing it to 17% after certain asset deductions.

• Total capital needs, including Credit Suisse acquisition effects, could exceed $40 billion, which is viewed as disproportionate.

• A consultation and political process will follow, with the company aiming to ensure decisions are based on thorough cost-benefit analysis.

• No changes to capital return plans through 2025; 2026 plans will be clarified after Q4 2025 earnings.

• A phase-in period for new capital rules is expected, likely over four years, but details remain to be clarified by the Federal Council.

Business performance and market environment

• Q2 saw calmer equity markets but continued bond market unease; global fee pools and dealmaking are down mid to high teens.

• A $75 million adverse P&L is expected in the LCM business due to a mark on an individual position and risk management losses.

• Dollar weakness against the Swiss franc will increase GWM operating expenses by about $150 million, with partial revenue offsets.

• Settlement of a legacy Credit Suisse DOJ matter will result in a $400 million litigation credit.

• A $250 million tax credit is expected in Q2, supporting net profit.

Wealth management and business initiatives

• Global wealth management, especially APAC, performed strongly post-integration; U.S. wealth aims for mid-teens pre-tax margin by 2027.

• Initiatives include enhancing net interest income, cost discipline, aligning advisor incentives, and improving acquisition channels.